Back in 2010 the UN Convention on Biological Diversity made much in its Aichi Targets for the decade of developing ‘novel-funding mechanisms’ to support conservation efforts. One approach had been emerging out of the Climate Change and carbon emissions work on how polluting countries and private enterprises can offset their emissions by buying carbon credits from countries with emissions lower than their allocations and thus encouraging overall reductions. It was recognised that natural systems can capture and lock-up carbon and that forests in particular stored massive amounts of carbon in their living biomass and in their soils. In followed that damage to forests was a major source of carbon release, while preserving forest could be a mechanism for carbon reduction. Out of this emerged the REDD scheme for carbon trading which aimed to Reduce Emissions from Degradation and Deforestation; a more demanding standard REDD+ took further notice of wider ecosystem service benefits such as soil preservation and water management as well as biodiversity protection; so it was possible for polluters to support forest and biodiversity conservation through carbon trading – that was the theory.

At that time one of the most exciting projects was Rimba Raya, a section of surviving forest in Central Kalimantan, Indonesia, covering an area of almost 64,000 hectares right in the centre of one of the surviving Orang-utan habitats. The project had begun in 2008 in a partnership between InfiniteEARTH and the Orangutan Foundation. The hope was that the lure of a profitable carbon market would secure this significant ecological system from the massive impacts of deforestation and palm oil plantation development which was devastating most of Indonesia’s forests.

However while the world watched eagerly to see if private and public investments could make a difference, conflicts of interests soon emerged. Not the least was by way of the Indonesian Forestry Commission, which in 2011 suddenly announced that it was to scale the project back by a half, giving over the rest as a concession to Best a palm oil company. Not only did this throw wide-open the question of the Indonesian Government’s commitment to REDD; it bought into question the entire project’s ability to become compliant with the emerging REDD standards. The investors were significant; including $1 billion from the Norwegian Government and major interests from Russian fuel giant Gazprom and German insurer Allianze. The repercussions were much wider, bringing into question REDD investments emerging across the globe as they were to varying degrees subject to both the vagaries of the carbon markets and to political will. It was particularly apparent from Rimba Raya that the projects needed to show economic viability not just to the investors but to host nations. The ban on logging concessions it implied would impact significantly on powerful vested interests close to the Ministry of Forestry and, given the issue of dealing with corruption, this was no trivial issue. Meanwhile, as the project was not protected from the political risk and with few insurance options, this was reflected significantly in investors’ valuations. Rimba Raya’s lack of certainty around the policy, pricing mechanisms and legal frameworks exemplified the issues facing these schemes. In 2011 Reuters had reported how it looked unlikely that the huge project would survive the government’s about-face and the mismatch between the government’s public green position and the power of the palm oil lobby.

However, there was also significant reason to persist, and not only on conservation grounds. The project was expected to generate an average of nearly four million tons of additional stored carbon dioxide (CO2) per year. In the course of 2012 significant developments took place resulting in the project being restored to its original scale. Jakarta Globe reported in December 2012 how Singapore business magnate Rusmin Widjajam, who has significant interests in Indonesia, intervened to publicly support the project as did the Governor of Central Kalimantan. Perhaps more significant were several green-minded wives of high-ranking officials, including the wife of the Head of Indonesia’s State Intelligence Agency, who was reported to have convinced Best to withdraw their interest. Together these ‘powerful friends’ turned the tide and succeeded in getting the government to retract the forest department’s decision.

Just last month an audit team from SCS Global Services confirmed that 2,181,352 Verified Carbon Units (VCUs) were generated by the reserve area between July 2009 and June 2010. No REDD project has ever been issued this quantity of VCUs for a single year reporting period and over a 30 year period the project had the potential to reduce total emissions by 119 million equivalent tons of CO2. Having achieved certification under the Verified Carbon Standard (VCS), Rimba Raya now looks set to pave the way in investments to preserve carbon-rich tropical peat swamps and forests. While this gives confidence that the emissions reductions are real and valuable the project also meets the requirements of the Climate, Community and Biodiversity Alliance (CCBA) standard by supporting the livelihoods of local communities and the area’s rich biodiversity and has become the first in the world to earn the Triple Gold Validation CCBA. With the audited credits now on the market the project’s future looks more promising – though given that a day is a long-time in politics eyes are still very much on how Rimba Raya now moves forward and how other schemes follow.